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Utility companies claim to be losing millions of dollars due to theft of service and equipment, a significant problem they say is affecting not just their bottom line, but the service to customers as well.

This was disclosed at a recent webinar hosted by the Office of Utilities Regulation (OUR) on Tuesday, 2018 July 31.

The webinar, entitled: Do the Right Thing: How Theft Impacts your Utility Services, saw for the first time, representatives of all the major utility companies converging to speak on this issue and how it is impacting them and their customers.

Director of Losses Operations & Analytics at the Jamaica Public Service Company Limited (JPS), Rasheed Anderson says the light and power company estimates that approximately 200,000 households and commercial entities are stealing electricity. This compared to the approximately 600,000 legitimate customers on its system.

According to Mr. Anderson, "When persons steal electricity, it impacts the quality and reliability of our power. It damages equipment that are essential to serving you and we have seen in many instances where sometimes people are out of power due to persons stealing from us." He further asserted that in 2017, JPS paid US$70.8 million for fuel that was not recovered and that to date for 2018, US$32.2 million was spent on fuel which was not recovered.

The National Water Commission (NWC) says it estimates that between 12% and 30% of the water produced by the NWC is stolen.

Corporate Communications Manager at the NWC, Charles Buchanan, says the NWC estimates that approximately 250,000 to 300,000 connections are involved in the theft of water.

Mr. Buchanan says, "We categorise the instances of theft affecting our operations in primarily four ways: Infrastructure theft; theft from our employees which has created significant issues in our ability to carry out work in certain areas; theft in our watershed areas, and theft of service and supplies."

Mr. Buchanan continues: "We continue to see illegal connections, meter tampering and meter bypasses, illegal use of water from hydrants and illegal commercial and other types of consumption." The significant levels of theft, he says, is costing the water company millions of dollars annually.

Telecommunications companies Digicel and FLOW report that they are also being significantly impacted by theft and vandalism. This includes theft of cables, generators, batteries and fuel.

Director of Corporate Communications and Stakeholder Management at FLOW, Kayon Mitchell, says so far this year, approximately fifty one (51) communities have been affected by theft and vandalism, costing FLOW US$1.9m to restore services. This compares to a cost of US$6m to restore services in 2015 and 2016.

Digicel, which is experiencing similar issues of theft and vandalism, says expensive equipment including

batteries placed at cell sites, are being stolen and sold for scrap metal.

Group Head of Field Operations Management at Digicel, Anthony Barrows pointed out that batteries

which cost the companies approximately J$80,000 each, are being sold for scrap metal for less than

J$2,000 each.

The OUR has been putting the spotlight on theft of utility services and equipment and has launched a

media campaign on this issue.

Director General Ansord E. Hewitt, says that apart from the losses to the utilities, and the subsidies that

have to borne by the paying rate payers, he is also deeply concerned about the disruption to economic

life, the risk to life and limbs and the inconvenience imposed on the country by this practice.

My notes

BNamericas delivers on-the-ground insight and trusted business intelligence to companies and investors active in and entering Latin America. Identifying opportunities early on and connecting clients with decision-makers across 12 industries, BNamericas is the edge your company needs in Latin America.

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Methodology & Procedures

Definitions

Projects covered include state-owned and private projects in the Infrastructure, Electric Power, Oil & Gas (excluding upstream), Water and Waste, and Mining sectors.

Where applicable, a project is considered as such until the end of construction and ramp-up to full capacity (with the exception of mining projects, where the date of commissioning signifies the end of the project). Projects must have a:

Data

For state-owned projects, initial information about the start date and estimates for completion and investment are taken from original signed contracts, along with addendums and annexes.

If original contracts cannot be obtained, information is taken from public documents, presentations, news articles from BNamericas archives, and external sources.

In cases where contracts are subject to approval by legislators, the start date is the date of the law or legislative approval.

In the case of private projects, information is taken from public sources, such as stock exchange filings, annual reports, company presentations, third party research and press releases.

In judging the timing of investment decisions for private projects, great care was taken to differentiate between large projects receiving environmental approval and proceeding directly to construction, and smaller projects where the investment decision hinges on securing financing.

Best care is taken to ensure that recorded data is correct at the time of entry and that each entry is backed with a relevant source.

The greatest care possible was taken to ensure consistency of information in order make a like-for-like comparison in project costs. Insofar as the figures rely on disclosure by the organization or company responsible, the figures can be considered to be conservative in nature.

No attempt was made to adjust figures for inflation during the course of research or for consideration of the time value of money.

Validation

In the case of state-owned projects, validation is carried out where possible with either a member of the consortium, EPC contractor, a relevant state agency or advisors to either party.

Currency

Projects costs are measured in US dollars. Where project costs are measured in a local currency, amounts are converted to US dollars at the date of the relevant announcement, signature or report.

Severity of deviation from original estimates

The severity of deviation from original estimates is defined according to set criteria.

Timing

Status

Condition

Ahead of time

95% of original estimate or below (measured in months)

On time

95% to 105% of original estimate

Minor changes

105% to 120% of original estimate

Medium changes

120% to 160% of original estimate

Major changes

Over 160% of original estimate

Budget

Status

Condition

Ahead of budget

95% of original budget estimate or below

To budget

95% to 105% of original budget estimate

Minor changes

105% to 120% of original budget estimate

Medium changes

120% to 140% of original budget estimate

Major changes

Over 140% of original budget estimate

Changes in Scope

Changes in scope beyond the start date are not accounted for.

Language definitions

Where guidance is non-specific as to dates for completion, the following is used. Project to be completed by 2018 = December 31, 2017 Project to be completed in 2018 = December 31, 2018